Pay Equity

Implementation

Information on the Care and Support Worker (Pay Equity) Settlement Act 2017 and how it is to be implemented can be found in the Operational Policy Document. This document includes information on qualification verification and translation to new pay bands, ratification payments and information sessions.

Please note this is a live document with changes being made as issues arise.

We recommend you become familiar with this document. If you have any questions please email Alyson Kana, Senior Policy Analyst at the NZACA office. Alternatively providers are encouraged to contact their funder/DHB. Each funder has identified a pay Equity specialist to answer provider questions or resolve issues.

The Settlement Agreement was signed between the Government and unions on 2 May 2017. This document can be viewed here.

Accrued leave data collection

The Ministry of Health is contributing to the impact of the Care and Support Worker (Pay Equity) Settlement on the cost of annual leave and lieu days for public holidays that were accrued prior to 1 July 2017. The Ministry will cover both Health and ACC eligible services.

The NZACA has been working with the Ministry on the data collection tool for the accrued leave liability payment. This tool (similar to that of the Workforce Translation Tool) should be sent to providers in early August. After verification of the data, annual leave liability payments will be made from 29 September.

Qualification verification and translation to new pay bands

Please see sections 3 and 4 of the Care and Support Worker (Pay Equity) Settlement Operational Policy document and the Agreed Position of the Parties in appendix 2 for details of qualification verification and translation to new pay bands.

Background

In 2012 caregiver Kristine Bartlett and the Service and Food Workers Union lodged a claim with the Employment Relations Authority, alleging Ms Bartlett’s employer Terranova Homes and Care Ltd was in breach of the Equal Pay Act.

As New Zealand’s largest aged residential care home membership organisation, NZACA decided to stand behind defence of this case on behalf of Terranova because the equal pay claim is a sector-wide issue that has significant ramifications for our members and the wider aged care sector and could result in private sector aged residential care homes going out of business.

This was a landmark employment test case for New Zealand which potentially also has ramifications for other female-dominated sectors.

An underfunded sector

It is vital that aged care workers feel valued for the important job they do. Our members are good employers and have wanted to pay their workers more, but they were hamstrung by a contract with the Government, which funded homes for the care they deliver.

NZCA has been lobbying Government for many years to put more money into this sector which cares for New Zealand’s most vulnerable citizens.

NZACA welcomed the settlement announcement, albeit with concerns it would be properly funded and carefully implemented.

Government's Joint Working Group

In October 2015, at the same time the Government announced it would enter into equal pay negotiations to find a solution to pay rates for care and support workers, it set up a Joint Working Group to develop and recommend principles that provided practical guidance to employers and employees in implementing pay equity. The Joint Working Group included employer, union and government representatives

JWG recommendations were made in June 2016 and were accepted by the Government in November 2016.

The guiding principles the JWG recommended changed nothing as far as pay equity negotiations were concerned, however they did provide a set of guidance for employers economy-wide on future pay equity claims.

The Employment (Pay Equity and Equal Pay) bill currently making its way through Parliament came out the the JWG recommendations. You can read more about this bill here.

Read more in an Industry Update by NZACA Chief Executive Simon Wallace.

Settlement announcement

On 18 April 2017, the Government and the Unions officially announced that a settlement had been reached in the long-running caregiver equal pay case. The $2.048 billion settlement over five years will be funded through an increase of $1.856 billion through the Government's Vote Health allocation and $192 million to ACC.

The Pay Equity Case at a glance

2012Kristine Bartlett and the Service and Food Workers Union lodge a claim with the Employment Relations Authority, alleging Ms Bartlett’s employer Terranova Homes and Care Ltd was in breach of the Equal Pay Act 1972.

Nov 2012Ms Bartlett’s case referred to the Employment Court as it raises an important question of law.

June 2013A preliminary Employment Court hearing held on questions of law.

August 2013Judgement favours the plaintiff’s arguments about the jurisdiction and application of the Equal Pay Act 1972, allowing the case to proceed to its second, substantive stage.

Oct 2015The Government announces it will enter into negotiations over pay rates for care and support workers, involving unions, NZACA and other providers. It also announces a proposal to set up a Joint Working Group to develop principles for dealing with claims of pay equity under the Equal Pay Act.

Nov 2015 Case scheduled to go before the Employment Court but adjourned in October 2015 to early 2016 (dates to be determined).

Nov 2015Government-facilitated negotiations begin.

Jun 2016

Joint Working Group set up by the Government to develop principles that provide practical guidance to employers and employees in implementing pay equity makes its recommendations. Recommendations are now being considered by Ministers.

November 2016

The Government-facilitated equal pay negotiations are continuing. The Government is meeting separately with the union and providers, including NZACA. Click here for more detailed information about the court case timeline, the arguments and the court decisions.

April 2017

On 18 April, the Government announced a settlement in the Equal Pay Case.